Is delivery biz the new revenue booster for McDonald's in 2016?

McDonald's, the world largest burger chain, is focusing on delivery business, brand extension and innovation this year to give a boost to its revenues in the country.

The brand which has entered into 20th year of operation into the Indian market, will sharpen focus on innovation, delivery business, and brand extensions like McCafe in 2016, that have "significantly boosted" the company's revenues in the past year, Smita Jatia, MD of Hardcastle Restaurants, the master franchisee of McDonald's India (West and South) told PTI.

Major focus

"We are emphasising on innovation, and our brand extensions like McCafes and our delivery business, which have significantly added to our revenues," shared Jatia.

The fast-food chain is also betting on alternative, healthy offerings in the face of competition. "We have a slew of innovations in our menu that we will unveil this year," Jatia said.

McDonald's is facing competition from other international chain of restaurants, most recently Burger King, besides Domino’s, Pizza Hut and Dunkin Donuts among others, and food-on-demand delivery services.

However, Jatia says that the entire category is still nascent, and needs to mature. "The more the category grows, the better for our business," she said.

The burger category is growing at a healthy clip along the western fast food category, which is growing at 13-15 per cent every year, based on industry estimates.

Betting big on deliveries

With advent of food-tech business and growth of delivery players, McDonald's says that its home-deliveries have tripled in last seven years riding the wave of food technology.

"Our overall deliveries have tripled in the past seven years, and it's a good time to focus on building it," Jatia added. "Nearly 40 per cent of revenues from the McDelivery Service comes from online ordering, and it up from single digits in just three years," she added.

McDonald's India had said last year that it is stepping up its operations in the western and southern markets by doubling its outlets by 2020 from the present 216 with an investment of Rs 750 crore.

McCafes were introduced in 2014, and there are about 62 so far, which is expected to go up to 140 by 2017, the company had said.